European Markets Drop as Oil Above $100 Fuels Inflation Concerns
European markets are bracing for moderate losses on Tuesday, with Euro Stoxx 50 futures falling 0.7%. The focus is sharply on U.S. Consumer Price Index data for April, expected to show headline inflation rising to 3.7% from 3.3%, driven by higher gasoline prices amid the escalating U.S.-Iran conflict and Strait of Hormuz closure. A Trump-Xi meeting is scheduled for Thursday. South Korea's Kospi index reversed sharply, falling more than 3% after an official suggested citizens should receive dividends from AI-generated profits. Oil prices remained firmly above $100 per barrel.
AI profit tax idea sparks $3.8bn selloff in South Korea
South Korea's Kospi index closed at 7,643.15 points, down 2.29 percent, after briefly approaching 8,000 points. Foreign investors sold 5.6 trillion won ($3.8 billion) following a proposal by presidential chief of staff Kim Yong-beom to distribute a "citizen dividend" funded by taxes on AI chip profits. Samsung Electronics and SK hynix shares fell 2.28 percent and 2.39 percent respectively. Kim later clarified he meant using excess tax revenue rather than a new windfall tax. The presidential office said the remarks represented only an individual opinion.
Canvas owner pays hackers to stop data leak from 9,000 schools
Instructure, parent company of the Canvas learning management system, has reached an agreement with the ShinyHunters hacking group to prevent the release of stolen data from nearly 9,000 schools and universities worldwide. The breach, which began April 29, 2026, exploited a vulnerability in Canvas's Free-for-Teacher environment to exfiltrate approximately 275 million records containing usernames, email addresses, course names, enrollment information, and messages. The company confirmed on May 11, 2026, that it secured the return of stolen data and proof of deletion. Instructure has reported the breach to the FBI and CISA.
EU targets TikTok, Meta, X in child safety crackdown
Von der Leyen announced in Copenhagen that the EU is developing regulations targeting TikTok, X, Instagram, and Facebook to protect children from harmful social media practices. She said damages to young people are the deliberate result of business models treating children's attention as a commodity. The European Commission has launched proceedings against X for its Grok AI tool's alleged role in generating sexual images of women and children. The EU is exploring age-based restrictions with a legal proposal possible by summer. France, Denmark, and nine other member states are pursuing national bans on social media for teenagers.
Iran peace talks stall as ceasefire 'on life support'
Trump said the Iran ceasefire was "on life support" on May 12 after Tehran rejected Washington's proposal and demanded recognition of its sovereignty over the Strait of Hormuz. Oil prices climbed above $104.50 a barrel as the near-closure of the waterway disrupted global supply chains, with only three tankers exiting the strait last week. Iranian officials warned the United States to accept Tehran's 14-point peace proposal or face a parliamentary vote on enriching uranium to weapons-grade levels. Trump was scheduled to arrive in Beijing on May 13 for talks with Xi where Iran ceasefire was expected to be discussed.
Senate clears Warsh to become next Fed chair
Kevin Warsh cleared a Senate cloture vote Monday and is expected to become Federal Reserve chair by week's end, with final confirmation votes on his appointment and chairmanship scheduled for Tuesday and Wednesday. Powell's term as chair expires Friday. Warsh, 56, faces sharp questioning from Elizabeth Warren over his estimated net worth exceeding $100 million, cryptocurrency holdings, and stakes in SpaceX. The Federal Reserve confronts 3.5 percent inflation with three regional bank presidents dissenting at its last meeting, the highest number since 1992.
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- Iran expands Strait of Hormuz control zone tenfold. The Revolutionary Guard's Navy says the strategic waterway now spans 321-482km, a tenfold increase from its traditional definition, as Tehran threatens to use the passage to pressure Gulf states while blocking a fifth of the world's oil shipments.
- Trump Meets Xi in Beijing as Trade, Iran Stakes Converge. Xi hosts Trump as Beijing holds leverage on both the tariff standoff and Iran's Strait of Hormuz threats, with 16 American executives including Musk and Cook joining the delegation.
- US Inflation Hits 3.7%, Highest Since 2023. Gasoline and food prices drove the increase after oil topped $100 per barrel, keeping the Federal Reserve on hold and creating political headwinds for Republicans ahead of November elections.
- Starmer defies calls to quit as UK borrowing costs rise. Fahnbulleh became the first minister to resign and urge Starmer to set a departure timetable, while borrowing costs hit their highest level in nearly 30 years.
- Golden Dome missile shield would cost $1.2 trillion, CBO finds. The nonpartisan budget office's estimate is roughly six times higher than the $175 billion the president cited last year, surpassing the entire annual defense budget.